WSJ:BASE METALS: Shanghai Copper Falls On Credit, Euro-Zone Debt Concerns
By Chuin-Wei Yap
Of DOW JONES NEWSWIRES
BEIJING (Dow Jones)--Copper futures fell on the Shanghai Futures Exchange Thursday, extending losses amid worries about tighter domestic liquidity conditions and unabated concerns over euro-zone debt.
The most actively traded November copper contract settled 0.6% lower at CNY65,190 a metric ton.
Chinese copper fabricators will likely face tough economic conditions in the remainder of the year due to global economic uncertainties and the government's monetary tightening.
"Almost every company in the industry faces financing problems, and with no money available, there's no way to build or to expand," Chinalco Luoyang Copper Co. Deputy Director Chen Hongzhou said at an industry conference.
China's central bank last month ordered banks to tighten credit provided against letters of credit backed by--among other commodities--copper imports. This removed a means of cheap finance for copper trading companies.
Inflation worries also pressured China's equity markets lower Thursday, reinforcing a consensus that there won't be any easing in monetary policy in the near term.
London Metal Exchange base metals closed mostly lower Wednesday, as investors remained nervous amid conflicting reports on a new, upgraded bailout fund for the euro zone.
The three-month copper contract ended $140 lower at $8,630/ton and was quoted marginally higher, at $8,648/ton, around 0700 GMT when the Shanghai bourse closed.
Spot prices at the Changjiang Nonferrous Metals Trading Market, a major spot metals market in Shanghai, were quoted at CNY65,400-65,500/ton, down from CNY66,350-CNY66,450/ton Wednesday.
Shanghai lead and zinc also settled lower Thursday. Aluminum rose 0.1% on the back of stronger demand-side fundamentals.
Following are Thursday's settlement prices in yuan a metric ton and LME late kerb prices from Wednesday in dollars a ton:
SHFE LME
Copper Nov 65,190 Dn 390 3Mo 8,630 Dn 140
Aluminum Nov 17,340 Up 20 3Mo 2,359 Dn 10
Zinc Nov 16,770 Dn 50 3Mo 2,161 Dn 31
Lead Nov 16,420 Dn 100 3Mo 2,343 Dn 45
-By Chuin-Wei Yap, Dow Jones Newswires; 8610 6588 5848; chuin-wei.yap@dowjones.com
